Observations by an academic researcher on the use of “open”-ness as a competitive strategy, with a particular interest in coping with the commoditization of information goods and technologies in an Internet-enabled world.

Friday, April 10, 2009

Advocates of cap-and-trade argue that it is preferable to a simple carbon tax because it fixes a national cap on carbon emissions and it “hides the ball” — it doesn’t use the word “tax” — even though it amounts to one. So it can get through Congress. That was true as long as no one thought cap-and-trade could ever pass, but now that it might under Mr. Obama, opponents are not playing hide the ball anymore.

In the past two weeks, you could hear a chorus of Republicans, coal-state Democrats, right-wing think tanks and enviro-skeptics all singing the same tune: “Cap-and-trade is a tax.” …

Since the opponents of cap-and-trade are going to pillory it as a tax anyway, why not go for the real thing — a simple, transparent, economy-wide carbon tax?

Since it appears that the NYT has run out of dictionaries and their Internet connection is down this week, let me provide a few common definitions of the word “tax”:

tax. Money paid to the government other than for transaction-specific goods and services. — Wikitionary

tax. n. (14th century). 1a.a charge usually of money imposed by authority on persons or property for public purposes. — Merriam-Webster Dictionary

tax. 1. a. A compulsory contribution to the support of government, levied on persons, property, income, commodities, transactions, etc., now at fixed rates, mostly proportional to the amount on which the contribution is levied. — Oxford English Dictionary.

WASHINGTON (Reuters) - President Barack Obama's estimate of $646 billion in revenue for the first years of a carbon-capping program to curb climate change is realistic or possibly a little low, policy analysts said on Thursday.

Obama's budget for 2010 projects this revenue, from 2012 through 2019, will fund $150 billion in clean energy technology investments over 10 years and a tax credit to help Americans make the transition to a less carbon-intensive economy.

It appears that one of the prerogatives of a pundit is to say that red is green and expect people to believe it. This is nearly as Orwellian as “love is hate.”

Compelling $600+ billion in payments to enable other spending does not “amount to” a tax: it is a tax. The regressive nature of the wealth transfer is worth debating, but there are more fundamental issues. The regulation will distort the market, and create a government addiction to that distortion and the associated tax revenues.

In normal circumstances, a tax increase of a half-trillion dollars annually would be a cause for alarm. But it appears that today too many voters are inured to such excesses.